SHANGHAI – Tesla Inc plans to start work on a new plant in Shanghai as soon as next month as part of a plan to more than double production capacity in China to meet growing demand for its cars in the country and export markets, two people familiar with the matter told Reuters.

Once the new plant is fully operational, Tesla will have the capacity to produce up to 2 million cars per year at its expanded Shanghai facility, the company’s main export hub, according to the people, who asked not to be identified in discussing still-private plans.

The new plant will be located in the vicinity of its existing production base in Lingang, Pudong New Area.

Tesla declined to comment.

The expansion, if it goes ahead, would give Tesla EV-dedicated production capacity in the world’s largest auto market on a par with more established brands in China.

In comparison, Toyota Motor Corp produced 1.6 million vehicles in China in 2021. General Motors produced 1.4 million with its major Chinese partner SAIC Motor Corp . Volkswagen plans to have capacity to make 1 million EVs in China by 2023.

The cost of the planned expansion and Tesla’s timetable for completion were not immediately known.

Tesla started production at its Shanghai plant – also known as the Gigafactory 3 – less than a year after breaking ground. The plant makes the Tesla Model 3 sedan and the Model Y crossover.

Expansion plans for the existing plant aim to put Tesla on track to produce around 1 million vehicles this year, two sources familiar with the expansion plans told Reuters, though one said this also depended on the availability of parts.

Tesla has projected to take its weekly production to about 22,000 vehicles at the plant in the coming months, one of the sources said.

That production rate would amount to about 1.1 million vehicles over a year, more than double the plant’s original projected capacity.

Reuters previously reported that Tesla could expand its capacity on the existing site.

The Shanghai city government did not immediately respond to a request for comment.

Shanghai has been a supporter of Tesla’s establishment of a wholly-owned factory in China – the first foreign auto plant not required to form a joint venture with a Chinese partner.

In a regulatory filing with Shanghai earlier this week, Tesla said it planned to expand parts production at its Shanghai factory, hiring additional workers and running its factory for longer in a day, to meet growing export demand.

Tesla sales have surged in China and its Shanghai factory has become a crucial export hub to markets such as Germany and Japan. Last year, Tesla’s China-made cars accounted for around half of the 936,000 vehicles it delivered globally, based on Reuters calculations using China Passenger Car Association data.

Earlier this month, Tesla said its China revenue more than doubled in 2021 to $13.8 billion from the previous year. Elon Musk also said in October that Shanghai had surpassed its Fremont, California factory — the company’s first plant — in output.

Tesla has faced delays in opening a plant in Germany. Musk had originally aimed to open a Berlin plant in July last year. Approval for the plant has been complicated by a court case challenging a licence granted to its water supplier.

(Reporting by Zhang Yan and Brenda Goh in Shanghai, Hyunjoo Jin in San Francisco; Editing by Kevin Krolicki and Jane Merriman)

BERLIN – Mercedes-Benz hopes to acquire certification for Level 3 autonomous driving in the United States this year, and discussions with authorities in China on the topic are ongoing, Chief Executive Ola Kaellenius said in a press call on Thursday.

“We are working on the United States and are in talks with authorities in China about certifying such a technology there,” Kaellenius said, having stated earlier that the carmaker wanted to extend Level 3 autonomous driving beyond Europe this year.

Mercedes-Benz was the first automaker to receive clearance from Germany’s car watchdog for its semi-autonomous driving system last December, based on technical requirements laid out in United Nations regulations.

It plans to offer the S-Class with Drive Pilot to customers in Germany in the first half of 2022.

(Reporting by Victoria Waldersee; Editing by Miranda Murray)

By Christoph Steitz and Patricia Weiss

FRANKFURT -Wintershall Dea, one of the co-funders of Gazprom’s Nord Stream 2 gas pipeline, on Thursday said cancelling the project on political grounds would enable its operator to lodge compensation claims.

The group’s remarks come as Moscow launched an invasion of Ukraine only days after Germany pulled the plug on certifying the pipeline in a first wave of sanctions on Russia, where Wintershall Dea has been active for more than three decades.

The Germany-based oil and gas firm, which is co-owned by BASF and Russian billionaire Mikhail Fridman’s LetterOne investor group, on Thursday cancelled its annual press conference in light of current events.

“The latest military escalation also shakes the economic cooperation between Russia and Europe that has been built up over decades and will have far-reaching consequences,” CEO Mario Mehren said in a statement.

“To what extent cannot yet be foreseen.”

Wintershall Dea along with Uniper, Shell, Engie and OMV <OMVV,VI> is one of the financial backers of Nord Stream 2.

It has previously said its loan payments to the project amounted to 730 million euros ($821 million).

Uniper, whose shares hit a 14-month low on Thursday, a day earlier said it was assessing whether the pipeline’s suspension would trigger impairments on its 1 billion euro exposure to the project.

“Should the commissioning of Nord Stream 2 be prevented by political intervention, we assume that the project company will be able to enforce compensation claims,” the company said in its annual report, referring to pipeline operator Nord Stream 2 AG.

“Currently, Wintershall Dea sees no reasonable scenario in which there will be political intervention without compensation,” it added.

German Chancellor Olaf Scholz earlier this week revoked a security assessment by the country’s Economy Ministry, saying a new one was needed in light of current events and effectively suspending the pipeline for the foreseeable future.

Wintershall Dea said that even if the certification process by the German regulator was delayed it expected Nord Stream 2 to fulfil its contractual obligations towards its financial investors, without elaborating.

“I appreciate your understanding that today is not a day to discuss hypotheticals and unknowns,” Wintershall Dea finance chief Paul Smith told analysts on Thursday after presenting the company’s full-year results.

He said instead of a questions-and-answers session that is typical for this sort of investor call, the group would set up individual calls in the coming weeks “as and when there is some greater clarity around the events which are unfolding as we speak and we can deal with facts, rather than speculation”.

($1 = 0.8895 euros)

(Reporting by Christoph Steitz and Patricia Weiss, editing by Miranda Murray and Jason Neely)

By Pete Schroeder and Michelle Price

WASHINGTON -U.S. banks were well-prepared for the Western sanctions announced so far over Russia’s aggression towards Ukraine, but they are still nailing down details and worry that new measures could increase the cost and complexity of enforcing the new restrictions, lawyers and industry executives said.

Russian President Vladimir Putin authorized a military operation in eastern Ukraine on Thursday in what appeared to be the start of war in Europe over Russia’s demands for an end to NATO’s eastward expansion.

U.S. President Joe Biden said he would announce further sanctions on Russia on Thursday, in addition to financial measures imposed this week.

The United States, the European Union and Britain on Tuesday announced new sanctions on Russia after Moscow’s recognition of two separatist regions in Ukraine. Chief among their targets: Russian banks and their ability to operate internationally.

Washington imposed the harshest measures on Monday prohibiting trade and investment between U.S. individuals and the two breakaway Ukraine regions and moving on Tuesday to cut off Russia state-owned Promsvyazbank and Vnesheconombank and 42 of their subsidiaries from the U.S. financial system.

The U.S. Treasury also barred trading in newly-issued Russian sovereign debt, and ordered that assets relating to a handful of Russian elites and their family members be frozen.

Financial institutions are the primary enforcers of sanctions.

In the past they have paid hefty fines for falling down on the job but since 2014 when countries sanctioned Russia for annexing the Crimea, banks have pulled back from the region and beefed up their sanctions compliance programs.

U.S. banks spent an estimated $35.2 billion on financial crime compliance – including sanctions, anti-money laundering checks and controls against other illegal activities – in 2020 alone, according to a LexisNexis survey.

As tensions in the region rose, the Biden administration was in touch with the industry for several weeks on potential measures and alerted banks ahead of Tuesday’s announcement so the industry could prepare, three industry sources said.

“The new U.S. sanctions should not be hard to implement because, at least for now, the Russian bank designations are fairly discrete and, post-Crimea, U.S. and global banks have had ample time to address the nuances of these kinds of sanctions,” including identifying beneficial asset owners, said Mario Mancuso, international trade partner at Kirkland & Ellis LLP.

Still, industry executives starting to implement the rules on Wednesday said they were seeking additional clarity from the Treasury on some details, most importantly the precise geographic boundaries of the breakaway territories.

“Those jurisdictions are defined under Ukraine law but they may or may not be what the breakaway jurisdictions assert is within their alleged sovereignty and that may change,” said Andrew Shoyer, a partner at law firm Sidley Austin.

He added that the 30-day deadline the Treasury had given companies to comply was the toughest it dishes out.

A spokesman for the Treasury did not immediately respond to a request for comment.

MORE TO COME

The White House and other nations said Tuesday’s measures are just the start. Some additional sanctions, like expanding their scope to include more Russian banks or individuals would be relatively simple to handle.

But executives flagged concerns that jurisdictions might diverge in their sanctions approach if disputes arose over how to address Russian aggression. Reuters reported last week that the U.S. and its allies are not agreed on how they should respond to non-military Russian aggressions, like identifiable cyber attacks.

“I think more financial sanctions on big Russian banks are probably inevitable, and that will hurt everyone in Russia who relies on them to do business with the outside world,” said Nick Turner, a lawyer specializing in sanctions and anti-money laundering at Steptoe and Johnson in Hong Kong.

“It’s hard to predict the consequences because it’s not often you see major institutions being carved out of the financial system. As far as the U.S. and E.U. banks are concerned it is the equivalent of having a major counterparty disappear, and whatever financial impact that would have would be the same.”

Conflicting sanctions regimes would be more complex and expensive to implement, executives said.

Another major question is whether Biden imposes “secondary sanctions” on overseas parties that do business with the underlying sanctioned entities. Those are also trickier to implement because of the complexity of identifying business ties.

Some financial industry executives have also told the administration that they oppose any sanctions that would target Russia’s access to payment provider SWIFT, which is used by more than 11,000 financial institutions in over 200 countries.

Such a move could hurt Russian banks but it would also be disruptive for the global payments system and make it tough for creditors to get their money back from Russia.

While the White House has downplayed that option, lawmakers could pursue it. Although Congress is on recess this week, Isaac Boltansky, policy director for brokerage BTIG, said he expected lawmakers to advance legislation to challenge Russia’s action soon.

“There will also be an effort to ban Russia from the international payments infrastructure SWIFT, but there are concerns that doing so could harm Russian creditors awaiting funds,” he added.

(Reporting by Michelle Price and Pete Schroeder, additional reporting by Hannah Lang, Liz Dilts and Alun John; editing by Richard Pullin and Jason Neely)

By Josh Smith and Hyonhee Shin

SEOUL – South Korea said on Thursday it would join in unspecified multilateral economic sanctions on Russia in response to its military operations in Ukraine, but is not considering adopting unilateral measures.

Russian forces fired missiles at several cities in Ukraine and landed troops on its coast on Thursday, officials and media said, after President Vladimir Putin authorised what he called a special military operation in the east.

President Moon Jae-in said at a National Security Council meeting that Ukraine’s sovereignty, territory, and independence must be respected, press secretary Park Soo-hyun told a briefing.

South Korea will support international efforts to restrain armed aggression and seek a peaceful resolution, including by joining in economic sanctions, Park quoted Moon as saying.

A foreign ministry official who later briefed reporters mentioned export controls as part of possible international sanctions.

“Of course some countries are considering unilateral sanctions including financial measures but we are not considering that.”

Discussions are under way to finalise details, the official added.

(Reporting by Josh Smith and Hyonhee Shin; Editing by Tom Hogue, Simon Cameron-Moore and Tomasz Janowski)

By Anait Miridzhanian

-Europe’s biggest hotel group Accor said on Thursday it was “well on the way” to more normal levels of activity this year after its core earnings swung back to profit in 2021, helped by higher absorption of fixed costs.

The travel and hospitality industry is still recovering from the pandemic while European countries make plans to ease COVID-19 restrictions due to a drop in coronavirus infections.

Accor, which runs high-end chains Sofitel and Pullman, as well as budget brands such as Ibis, said its business had started to recover in April despite the impact from the pandemic, leading to a significant pick up in activity.

The rebound paused in January due to the Omicron variant outbreak, but the month of February represented “a turning point”, the French hotelier said.

By the end of 2021, average room rates came close to or even exceeded pre-COVID-19 levels thanks to an improvement in demand, Accor said.

It flagged an impressive recovery in the Middle East region, which has benefitted from the world’s fair Expo 2020 in Dubai.

TO HELP EMPLOYEES IN UKRAINE AND RUSSIA

Deputy CEO Jean-Jacques Morin told journalists the group owned seven hotels in Ukraine and about 55 in Russia, when asked about the ongoing crisis.

“We will follow last night’s situation but the direct impact is very limited,” Morin said.

Chairman and Chief Executive Officer Sebastien Bazin said on a call with analysts that the group will provide help to its employees in Ukraine and Russia.

“I am putting aside that Ukraine and Russia is less than 1% of the net worth, because that is absolutely irrelevant. What’s relevant is that we have 2000 people in Russia, we have a couple hundred people in Ukraine and we care for them”, Bazin said.

“The most important thing for me and the teams of Accor is to make sure the people are safe, to make sure you talk to them, to make sure you provide whatever they need and to make sure they know that you are there,” he added.

SHARES DROP

The group posted full-year earnings before interest, taxes, depreciation and amortisation (EBITDA) of 22 million euros ($24.69 million), bouncing back from a loss of 391 million a year earlier.

The group’s revenue per available room (RevPAR), a key gauge of performance for the hotel industry, was down 46% in 2021 compared with the pre-pandemic level in 2019, reflecting the resurgence of the COVID-19 pandemic.

For 2022, the group forecast a 3.5% net growth in its hotels network against a 3% growth last year.

“By the end of the first quarter we will be back to pre-Omicron levels that we had at year-end,”, deputy CEO and Chief Financial Officer Jean-Jacques Morin said referring to fourth-quarter numbers.

Morin added that the health situation is now significantly relaxed and said the company might provide new guidance with is first-half results.

Accor shares fell 7.4% to around 29 euros at 1012 GMT while France’s SBF 120 index dropped 3.5%.

($1 = 0.8912 euros)

(Reporting by Anait Miridzhanian; editing by Milla Nissi)

ATHENS -Greek Prime Minister Kyriakos Mitsotakis condemned Russia’s attack on Ukraine on Thursday but said Greece has sufficient energy supply.

Greece imports 40% of its natural gas from Russia and also has contracts with Azerbaijan and Algeria.

“We are working on scenarios which have to do with the biggest possible absorption of fluctuations in energy prices,” Mitsotakis said after chairing a national security council meeting.

Mitsotakis, who will meet EU leaders at a summit later on Thursday to discuss new sanctions on Russia and the energy issue, condemned Russia’s attack on Ukraine, saying revisionist actions threaten geopolitical stability in Europe.

“Greece respects the territorial integrity, sovereignty and independence of all countries. It condemns revisionist actions which violate these values and brute force which will unfortunately cause the loss of many innocent lives,” he said.

“Historical revisionism by the use of arms must find against it the entire democratic planet. The responsibility of governments and the European family is being judged on this front,” Mitsotakis said.

(Reporting by Angeliki Koutantou and George Georgiopoulos; editing by Jason Neely)

LONDON – Russia does not want to use natural gas as a weapon in its conflict with Ukraine, the CEO of French energy company TotalEnergies said on Thursday.

“I am convinced the Russians don’t want to use gas as a weapon in the dispute,” Patrick Pouyanne said at the International Energy Week conference.

TotalEnergies’ operations in Russia, which include stakes in liquefied natural gas (LNG) plants, have not been affected by the conflict so far, he added.

Russia supplies more than a third of Europe’s gas.

(Reporting by Ron Bousso; Editing by David Goodman)